Debenhams (LSE: DEB) FY16 RESULTS: SALES PERFORMANCE IN LINE WITH EXPECTATIONS

Executive Summary

• UK-based department-store chain Debenhams reported gross transaction value sales of £2,939 million for the 53 weeks ended September 3, 2016, slightly above the consensus estimate of £2,902 million.
• FY16 statutory revenues came in at £2,310 billion, down 0.5% year over year for the 52 weeks ended August 27, 2016. Group comparable store sales increased +0.6% year over year in FY16, with comparable store sales mainly driven by online sales growth of 9.3%. UK-reported revenues declined by 0.8% and international revenues increased 0.9%.
• FY16 gross margin contracted by 10 basis points to 12.9%. Underlying EPS of 7.5p for the 52 weeks ending August 27, 2016, declined 1.3% year over year from 7.6p in FY15.
• For fiscal year 2017, guidance is for gross margin to change by between +25bps and (25)bps, total costs to increase by 2% to 4% and capital expenditure of £130 million. The company did not provide sales guidance.